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EU CBAM (Regulation 2023/956) – Carbon Border Adjustment 2026, Sectors, Certificates

Short Answer

The Carbon Border Adjustment Mechanism (CBAM, Regulation (EU) 2023/956) is the EU's carbon border adjustment tool: importers of certain emission-intensive goods must purchase CBAM certificates priced at the EU Emissions Trading System (EU ETS) rate — less any CO2 price already paid in the country of origin. The transitional phase (quarterly reporting only, no certificate obligation) ran from 1 October 2023 to 31 December 2025. The definitive phase started on 1 January 2026 — importers must now purchase certificates for each tonne of embedded CO2 emissions. Covered sectors: iron and steel, cement, aluminium, fertilisers, electricity, hydrogen. Extension to additional sectors (polymers, organic chemicals) announced for 2030. Authorised CBAM declarant replaces prior EORI holder (mandatory accreditation). Penalty for non-surrender: €100 per certificate not surrendered (analogous to EU ETS).

Key Facts

ItemValue
Legal BasisRegulation (EU) 2023/956 of 10 May 2023
Transitional Phase1 October 2023 – 31 December 2025 (reports only, no certificates)
Definitive PhaseSince 1 January 2026 – full certificate obligation
Currently Covered SectorsIron/steel, cement, aluminium, fertilisers, electricity, hydrogen
Extension Planned for 2030Polymers, organic chemicals, possibly downstream products
DeclarantAuthorised CBAM declarant (accreditation via national competent authority)
Germany's Competent AuthorityGerman Emissions Trading Authority (DEHSt) at UBA
CBAM Certificate PriceWeekly average price of EU ETS auctions [Art. 21]
Foreign CO2 Price CreditYes – CO2 price actually paid abroad is deducted [Art. 9]
Reporting Interval (Transitional)Quarterly, no later than end of month + 1 month after quarter end
Reporting/Surrender Interval (Definitive)Annual CBAM declaration by 31 May for prior year [Art. 6]
De Minimis ThresholdConsidered: 50 t CO2/year per declarant (under review)
Free EU ETS AllocationBeing phased out for CBAM sectors (fully by 2034)
Penalty Non-Surrender€100/t CO2 (analogous EU ETS Art. 16 ETS Directive)
Penalty Incorrect/Late DeclarationUp to €50/t unreported emission (national implementation)
Transit GoodsNot CBAM-liable
Small Consignments (< €150 customs value)Exempted [Art. 2(3)]

Scope of Application

CBAM applies to imports into the EU of selected goods from third countries (except Iceland, Liechtenstein, Norway, Switzerland — due to ETS linkage). Customs tariff codes (CN codes) are listed in Annex I of the Regulation. Covered:

  • Cement (CN 2523) – cement clinker, Portland cement
  • Iron and steel (CN 72xx, 73xx – selected positions) – pig iron, steel tubes, reinforcing steel, various semi-finished products
  • Aluminium (CN 76xx) – unalloyed and alloyed, tubes, bars, sheets
  • Fertilisers (CN 2808, 3102, 3105) – nitric acid, ammonia, urea, other N-fertilisers
  • Electricity (CN 2716) – electricity imports
  • Hydrogen (CN 2804 1000) – hydrogen gas, regardless of production method

    • Transitional vs. Definitive Phase

    Transitional Phase (1 October 2023 – 31 December 2025): Importers had to submit quarterly CBAM reports — including embedded emissions per imported good, production method applied, and any CO2 price paid abroad. No financial burden, only reporting obligation. Reports go via the EU Commission's CBAM Transitional Registry.

    Definitive Phase (from 1 January 2026):

    1. Importers must accredit as authorised CBAM declarant (in Germany with DEHSt)

    2. Purchase CBAM certificates matching embedded emissions

    3. Submit annual CBAM declaration by 31 May of following year

    4. Surrender certificates – settlement annual

    Foreign CO2 prices are credited: if the exporter has paid a CO2 price in the country of origin (e.g., UK, Canada, Chinese pilot ETS province), this is deducted from the CBAM price. Burden of proof lies with the importer.

    Who Is Actually Affected?

    Direct importers:

  • Steel traders importing from Turkey, China, India, Russia
  • Building material dealers with cement imports from Turkey, Morocco, Belarus
  • Aluminium processors with imports from UAE, China, Russia
  • Agricultural cooperatives with fertiliser imports
  • Border power plant operators with electricity imports
  • Hydrogen buyers (increasingly relevant with H2 expansion plans)

    • Indirectly affected:

  • Construction companies and renovators using imported steel/cement/aluminium (price effect)
  • Automotive suppliers with non-EU steel/aluminium
  • Chemical industry with fertiliser and hydrogen procurement

    • Price Effect for End Customers 2026

    CBAM increases the cost of emission-intensive imports. Example calculation for steel:

  • Chinese rebar 500 kg
  • Embedded emissions ~1 t CO2
  • EU ETS price Q1 2026: ~€85/t
  • Deduction Chinese pilot ETS price: ~€10/t
  • CBAM certificate: €75
  • Price mark-up: ~15 % vs. CBAM-free alternative

    • This increases competitiveness of EU steel (ETS-burdened, but still with residual free allocation) and EFTA steel (Norway, Iceland — no CBAM).

    Common Mistakes

  • "CBAM only applies to large industry." False — small importers are also liable if they import regulated goods above €150 customs value.
  • "Transitional phase = no obligations." False — there was a reporting obligation since 1 October 2023. Penalties for non-reporting during transitional phase: up to €50/t unreported emissions.
  • "Chinese CO2 price reduces CBAM to zero." Only partially — the Chinese pilot ETS is at ~€10/t, EU ETS at ~€85/t. Difference is payable.
  • "Transit goods are CBAM-free." Correct — pure transit without import into EU free circulation is exempted (Art. 4). Intermediate storage and re-export in customs warehouse falls under this.
  • "Recycled steel is CBAM-liable." Nuanced — CBAM is based on embedded emissions. Electric arc steel from scrap has significantly lower emissions than blast furnace pig iron and thus lower CBAM costs.
  • "EU Member States can weaken CBAM." False — it is an EU regulation, directly applicable, no national exceptions.

    • Sources

  • Regulation (EU) 2023/956 (CBAM) – EUR-Lex full text: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R0956
  • EU Commission – CBAM Portal: https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en
  • Germany's DEHSt – CBAM (EN): https://www.dehst.de/EN/climate-protection-projects-and-new-market-mechanisms/cbam/cbam_node.html
  • CBAM Transitional Registry: https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism/cbam-transitional-registry_en
  • German BMWK – CBAM FAQ: https://www.bmwk.de/Redaktion/EN/FAQ/CBAM/faq-cbam.html
  • German Environment Agency – Emissions Trading: https://www.umweltbundesamt.de/en/topics/climate-energy/emissions-trading

    • Change Log

  • 2026-07-02: Initial publication (English EU wave). Transitional phase (reports only) until 31 Dec 2025, definitive phase since 1 Jan 2026 (certificate obligation). Sectors iron/steel/cement/aluminium/fertilisers/electricity/H2. DEHSt as German authority. Extension 2030 to polymers/chemicals announced. | change_type=initial_publication field="topic_lifecycle" new="published" reviewed_by="Andreas Warkentin"

    • See Also

  • German CBAM version

    • Status

  • Date: 2026-07-02
  • Valid from: 2023-10-01 (transitional phase); full effect since 2026-01-01
  • Status: current
  • Source authority: A (EUR-Lex, DEHSt, EU Commission)
  • Licence: CC BY 4.0